Which provinces offer private auto insurance?

By SmartCoverage Team on November 2nd, 2017

Auto insurance in Canada is an industry of inconsistencies. All across the country, practices differ from province to province, with no regional uniformity dictating policy. The only real constant is that auto insurance, at some level, is mandatory for drivers.

While the federal government has gone and regulated that much, it holds no sway over the decision-making that sets individual provinces' auto insurance systems. There are lots of considerations that go into auto insurance policy, but the most important distinction that ends up emerging from them is of that between private and public insurance. A government can have valid reasons for instituting both, and in Canada, both sides have been well-represented.

The public insurance provinces

Four of Canada's 10 provinces have some form of public insurance. Three of them offer it in such a way that all of the mandatory coverage can be purchased from a single regulatory body (in this case, the corresponding crown corporation that has been set up). Those three provinces are Manitoba, British Columbia, and Saskatchewan, and the crown corporations are Manitoba Public Insurance, Saskatchewan Government Insurance, and the Insurance Corporation of British Columbia.

Québec is the outlier here (surprise, surprise). La Belle Provence operates under a hybrid system in which drivers are required to buy their personal injury benefits plan from a provider called the Société de l'assurance automobile du Québec, but get their minimum of $50,000 in property damage coverage from private insurers.

Does private auto insurance exist at all in those provinces?

Yes! Just in limited doses.

Drivers seeking private auto insurance coverage in Manitoba, British Columbia, and Saskatchewan will still have to buy all of the mandatory coverage from a public crown corporation, but they'll also have the option to buy any add-ons they desire privately. Each province's minimum requirements will be slightly different, but typically, add-ons fall under the umbrella of collision and comprehensive coverage. They will broaden the range of coverage and enhance the type of service drivers are getting.

Extra coverage can usually be bought through the crown corporation providing the mandatory insurance as well. But a lot of drivers prefer to just top up through a private company, likely because it gives them an opportunity to either save money (market competitiveness could lower pricing) or receive more expansive service.

Wait, does that mean private auto insurance is cheaper?

No! There is actually no correlation whatsoever between a province's choice of insurance system and the average annual premium costs for its drivers. According a 2013 study conducted by the Insurance Bureau of Canada (using 2009 and 2010 data for Manitoba and Saskatchewan, respectively), three of the top four most expensive provinces for auto insurance used private systems. Here is how the rankings list, which includes territories, turned out:

Ontario ($1,456)

British Columbia ($1,163)

Alberta ($1,140)

Newfoundland and Labrador ($1,066)

Manitoba ($1,057)

Nunavut ($985)

Northwest Territories ($977)

Saskatchewan ($882)

Yukon ($806)

Nova Scotia ($763)

New Brunswick ($759)

Prince Edward Island ($752)

Quebec ($715)

Conclusion

In purely technical terms, every province in Canada offers private auto insurance. But in more informative terms, three provinces have programs in place that require drivers to buy most, if not all, of their coverage from a regulated crown corporation that sells public insurance. Only add-ons can be purchased privately. Québec runs a hybrid system that splits the mandatory coverage between the public and private systems.